Nhi Operators Grapple with occupancy As Reit Seeks To Upsize Shop Segment 

National Health Investors (NYSE: NHI) leaders have grown the company’s SHOP segment to comprise 24% of its total NOI. The company continued that SHOP growth focus and momentum in the second quarter of this year, with some bumps along the way.

Operating partners of the Murfreesboro, Tennessee-based real estate investment trust (REIT) grappled with occupancy in 2Q26. Average occupancy for the same-store portion of the company’s senior housing operating portfolio (SHOP) dipped to 85.1% in the quarter, representing a decline of 400 basis points compared to 4Q25, when the segment registered at 89.1%.

Occupancy in the 15-community segment had “good momentum” in the second quarter of 2025, but “some exacerbated move-outs” halted it in the year that followed, according to Kevin Pascoe, NHI’s chief investment officer.

Pascoe added that same-store revenue per occupied unit (RevPOR) grew to $3,187 in the second quarter of this year, an increase compared to the segment’s 2Q25 RevPOR of $3,071. But general and administrative (G&A) expenses blunted margins by rising to $8.8 million for the quarter, an increase compared to the $6.1 million the REIT spent on G&A in 2Q25.

In the coming quarters, NHI leaders will focus on growing NOI margins and controlling resident acquisition costs in addition to pushing occupancy higher, Pascoe said.

“The key really is just making sure that we have the right people in place at the building and the management level,” he added.

To that end, Chris Maingot has joined the REIT as its chief operating officer, expanding the bandwidth of the company’s leaders like Pascoe to focus on expanding operator relationships and finding new communities to acquire. Todd Siefert has transitioned to become NHI’s chief financial officer in conjunction with the hiring.

Analysts with BMO Capital Markets Juan Sanabria and John Kim wrote that the REIT was “weighed down by higher G&A” expenses and “legacy SHOP assets continued to languish” in the second quarter of the year.

NHI stock dropped 5.8% to land at $69.95 by the time financial markets closed Tuesday.

The REIT first began its SHOP journey in 2024. Today, the company’s total segment comprised 42 communities as of the second quarter of 2026. Overall, NHI has 117 senior living communities and 33 skilled nursing facilities.

The company’s leaders finalized the sale of a largely skilled nursing portfolio from operating partner National HealthCare Corporation (NYSE American: NHC) for $560 million in July with intentions to use the proceeds toward senior living acquisitions.

Over the past 12 months, NHI has completed $237.2 million investments, of which more than $212 million went toward SHOP.

According to CEO Eric Mendelsohn, NHI has a three-year plan to increase its SHOP investments so it makes up between 40% to 50% of its total NOI.

Given the industry’s fundamentals of high incoming demand and low new construction starts, NHI sits at a “position of strength” for the second half of the year, with a pipeline of $127.3 million in signed letters of intent and $420 million potential transactions under evaluation.

“As we’re looking at initial deals, generally we’re looking at small- to mid-sized portfolios to establish a relationship, and then the singles are great bolt-ons for that opportunity,” Pascoe said. “If it’s the right operator, the right building, right geography, we’ll do that.”

Pascoe added the company’s leaders are seeking out RIDEA and triple-net deals, including with new operating partners.

“There are a couple operators that we would love to do additional business with, and we’re working on that as we speak,” he said.

The post NHI Operators Grapple With Occupancy as REIT Seeks to Upsize SHOP Segment  appeared first on Senior Housing News.